BTIG initiated coverage on The Liberty SiriusXM Group (NASDAQ: LSXMK) with a Buy rating and a price target of $44.

"Liberty’s stake in Sirius XM Holdings (SIRI), acquired in a $530mm 2009 loan, is now worth over $14bn. However, like many assets Liberty has owned, Liberty has not received full recognition of the NAV in the price of its stock. To close the NAV discount at Liberty Media Corporation (LMC), Liberty broke into three sets of trackers, including the LSXM set (A,K,B), which directly tracks its holdings of SiriusXM shares. Currently, LSXMK, which represents the greatest proportion of the LSXM shares, trades at a 14.9% discount to NAV," said analyst Brandon Ross.

"We believe this level of tracking stock discount is unwarranted given the pure play nature of the tracking stock, and Liberty will work to close the discount to ~4%, likely in 2017 to facilitate a clean-up of the minority SIRI shares. This, in our opinion, could be a step towards an eventual combination of SiriusXM, Live Nation and Pandora, a future we wrote about extensively in June in a piece titled, What’s in Liberty’s Head: Is Pandora the Key to Liberty’s Long Term Goal to Combine Live Nation and Sirius? (link). Even without Pandora in the mix, we believe Liberty wants to control SIRI, given Liberty is currently relatively capital constrained and can unlock additional value with SIRI’s cash flow and subscription platform, without destroying any optionality," added the analyst.

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